Title and settlement in Hanover, MD

Hanover lies between BWI Marshall Airport and Fort George G. Meade, and that location raises two questions to settle before any Hanover closing: which county is the home actually in, and what does living near an airport and an Army post mean for the contract?

Maryland First Title is an attorney-led title and settlement company with its office in Glen Burnie. We have handled title and settlement across Maryland since 1994. This guide covers what Hanover buyers, sellers and agents should check before settlement day. It is general information, not legal advice about your contract.

Start with the county line

Hanover is not an incorporated town. There is no town government and no town tax, so the rates come from the county the lot sits in. Most Hanover homes are in Anne Arundel County. The 21076 ZIP code, though, also covers part of Howard County, and homes on both sides of the line carry a “Hanover” mailing address.

The county decides:

• the county transfer tax and recordation tax rates
• the property tax rate and the yearly limit on assessment increases for your main home
• which Circuit Court records the deed, and where the county taxes are paid

Checking takes a minute. Search the address on the SDAT Real Property search (linked under sources below); the record shows the county, the tax account number and the owner of record. We confirm the county when the title order comes in, but an agent drafting the offer or a buyer comparing homes should look it up first. For more on ZIP codes that cross county lines, see which Maryland county is my address in.

Transfer and recordation tax on the Anne Arundel side

When the deed for an Anne Arundel home in Hanover is recorded, three taxes are due:

• state transfer tax: 0.5% of the price
• Anne Arundel County transfer tax: 1.0% of the price up to $999,999.99; 1.5% of the whole price when the price is $1,000,000 or more
• Anne Arundel recordation tax: $3.50 per $500 ($7.00 per $1,000), about 0.70%; rounded up to the next $500

By default, Maryland law has the buyer and seller share these equally. A contract can change that split, and many do, so check the tax clause in yours.

Take the county median sale price of $509,990. At that price the state transfer tax comes to $2,549.95, the county transfer tax to $5,099.90 and the recordation tax to $3,570, for $11,219.85 in all. Under an equal split the buyer pays $5,609.92 and the seller $5,609.93 (the odd cent of the state transfer tax goes to the seller). Enter a different price in the calculator on our Anne Arundel County page to see how the numbers move.

What can change the total:

• A first-time Maryland buyer. If each buyer has never owned a Maryland home as a principal residence and will live in this one, the state transfer tax drops to 0.25% of the price and the seller pays all of it. The county transfer tax and recordation tax then fall on the seller too, unless the contract expressly says otherwise. Each buyer signs a sworn statement. A co-signer on the loan who will not live in the home can sign as a co-maker or guarantor without stopping the buyer from qualifying. Turn on the first-time buyer option in the calculator on our Anne Arundel County page to compare.
• A price of $1,000,000 or more. Anne Arundel’s county transfer tax rises from 1% to 1.5%, charged on the whole price, not only the part over the threshold. So a sale at $1,000,000 costs noticeably more in county tax than one just below it. At $1,200,000, for example, the county transfer tax alone is $18,000.
• The buyer’s mortgage. A purchase-money deed of trust recorded with the deed is not subject to recordation tax.

Transfer and recordation taxes are only one part of the bill. The lender’s title insurance, an owner’s title policy if the buyer chooses one, the settlement fee, lender fees, recording fees, and the property tax and HOA adjustments come on top. For a full estimate use our instant quote; for every Anne Arundel rate in one place, see the Anne Arundel County closing costs guide.

When the SDAT record says Howard County

For a Hanover home on the Howard side, Howard’s county rates apply: county transfer tax of 1.25% of the price (effective July 1, 2020) and recordation tax of $2.50 per $500 of the price, about 0.50%. The state transfer tax and the default rules on who pays do not change.

Howard County also has a county transfer tax exemption for its own police officers and deputy sheriffs, its fire and rescue members, and certificated teachers employed by the Howard County Board of Education. It covers the member’s first purchase of a home in Howard County, with a capped rate on later purchases. At least one buyer must live in the home, and the member must stay in the job for three years, or the tax that was waived has to be repaid. The county’s Human Resources office or the Board of Education must complete the form before the deed is presented, so raise it as soon as you sign.

Both county taxes on a Howard deed are paid to the county’s Recordation Tax Office, not to the Clerk. The Anne Arundel figures on this page do not apply to a Howard home; our Howard County closing costs guide covers Howard in full.

Near BWI and Fort Meade

The military installation notice. Maryland residential sales contracts must warn that the home may be near a military installation and the noise that comes with it, everywhere except seven counties, Howard among them. So a contract for a Hanover home on the Anne Arundel side carries this notice; one on the Howard side does not. For more on buying in the area, see buying a home near Fort Meade.

Airport noise. The Maryland Aviation Administration maps an Airport Noise Zone around BWI Marshall. Whether a particular home is inside it depends on the exact address, so look the address up on MAA’s current noise zone map (linked under sources below) before you sign.

Fixed report dates. Service members and federal employees often have a start date that cannot move. Give us that date when you place the title order. If a buyer cannot attend settlement, a power of attorney may be possible, but the lender and the title insurer will usually both need to accept it first, so send it to us well before settlement.

Selling after a move. Sellers who have been reassigned sometimes sell after leaving Maryland. If the seller is not a Maryland resident for tax purposes, the deed cannot be recorded unless a withholding payment goes with it: for an individual, 8.75% of the net proceeds actually paid to the seller. There is no withholding if each seller certifies under oath, in the deed or a recorded affidavit, that the home is the seller’s principal residence. Whether a home you have moved out of still qualifies is a question to settle with us and your tax adviser, not to assume. A seller who expects to owe less, or nothing, can also ask the Comptroller for a full or partial exemption certificate on Form MW506AE. That takes time, so start well before settlement. Service members whose legal residence is in another state should raise this with us and their tax adviser early.

Title points we look at in Hanover

Homeowners associations. For a home in a homeowners association, the seller has to give the buyer the association’s disclosure package. If the buyer did not have all of it at least five calendar days before signing the contract, the buyer may cancel within five calendar days after receiving everything. We normally request the association’s statement of dues and fees so that anything unpaid can be paid from the seller’s proceeds at settlement.

Open county charges. Water, sewer and other county charges can sit on a property’s tax and utility accounts. We check the county tax and utility records so that open charges can be paid or adjusted at settlement.

When the owner has died. A sale after an owner’s death usually goes through the estate, with the personal representative signing the deed. Read selling an inherited house in Anne Arundel County and see our deeds and family transfers service.

Lot lines. An older deed can describe a lot loosely, and a fence or driveway may not sit where the recorded line does. Only a survey shows where the lines really fall. An owner’s title policy covers losses from covered title defects that the search missed. It is optional in Maryland, and its premium is paid once, at settlement; see why title insurance matters.

The critical area notice. Every Maryland sales contract carries the Chesapeake and Atlantic Coastal Bays Critical Area notice. The critical area generally covers land within 1,000 feet of tidal waters and tidal wetlands, where building and clearing are restricted. Most of Hanover is well inland, but whether a particular lot is in the critical area is a question for the county’s map, not an assumption either way.

The steps from contract to keys

In Hanover, the search covers the county tax records as well as the land records, so open county charges are paid off at settlement along with the seller’s mortgage. After settlement we record the deed and pay the taxes. How a Maryland settlement works walks through every step from ratified contract to recorded deed, and what to bring on the day.

Where the deed is recorded

An Anne Arundel deed is recorded with the Clerk of the Circuit Court for Anne Arundel County, Land Records Department, 8 Church Circle, Annapolis, MD 21401. The county transfer tax and recordation tax are paid to Anne Arundel County; the state transfer tax and recording fees are paid at Land Records. Deeds can also be recorded electronically.

A Howard deed goes first to Howard County’s Recordation Tax Office for the county transfer and recordation taxes, then to the Clerk of the Circuit Court for Howard County, Land Records and Licensing Department (Circuit Court, 9250 Judicial Way, Ellicott City, MD 21043) for recording and the state transfer tax. A deed sent to the wrong county is held up, which is another reason to confirm the county on day one.

Settle your Hanover home with Maryland First Title

Our attorneys can meet you for settlement in Hanover at no extra cost, whether at your home, your workplace or your agent’s office, or you can come to our Glen Burnie office. We handle residential settlements for purchases, sales and refinances, and we help buyers purchasing without an agent. Call (410) 768-2300 or get an instant quote.